Austin, Texas-based Harbor Health has secured $130 million in new funding from investors to expand access, services and insurance plans for employers and individuals. 

A startup primary and specialty clinic group, Harbor offers Central Texas employers a direct primary care option, which provides employees a full spectrum of primary care services for free. 

In January 2024, Harbor announced it had received $95.5 million in a funding round led by General Catalyst, bringing the total investment at that time to more than $128 million. The practice said its ultimate mission is to redesign the health system so that doctors and the team working with them truly get to know the people in their care.

Last December, Healthcare Innovation interviewed Harbor co-founder Clay Johnston, Ph.D., M.D., M.P.H., who previously served as the inaugural dean of the University of Texas at Austin Dell Medical School, about his ambitious plans for redesigning the health system from the ground up. 

He said the idea for Harbor “came from what we were trying to achieve at the medical school — to re-envision what the healthcare system should look like and build it that way. But we did it condition by condition in specialty areas. My realization was that we weren't going to succeed that way, that the incumbents in the healthcare system were so powerful and so strongly motivated to keep everything in the status quo that with one provider organization, it just wasn't going to work. We couldn't get the steerage. We couldn't get the contracts from carriers. We got a lot of interest from self-insured employers, and they bought some stuff directly from us. That helped us, but it wasn't enough to create a scalable system, and that's really what I was there to do.”

The realization, he said, “was that in order to make this work, we have to tear the whole thing down and rebuild it, not do a little remodeling. That is really what we're doing at Harbor, but we're doing it in a staged way. The first thing that you need if you're going to rebuild that system is a new system of first-touch care to replace primary care. What does that look like? How do you create it so that it really cares for individuals and their health and is motivated to keep them healthier and also to reduce waste?”

Harbor Health has grown from three clinic locations in 2022 to 11 clinics, including three Express Care clinics that offer extended hours, with more locations coming soon. It also operates two mobile clinics and an infusion center.

Harbor Health said its insurance plans are designed to offer large group employers and individual consumers more coordinated care and coverage together at a lower cost than traditional plans. Designed by doctors, the plans are built around a network of primary care providers and specialists, giving members direct access to care within Harbor Health. It also maintains partnerships with a wide array of external providers.

The company said the new funding would allow Harbor to expand its large-employer health insurance plans and launch individual and family insurance plans that will be available on healthcare.gov, the Individual Insurance Marketplace, in November. It also enables the company to continue expanding its clinical footprint to broaden consumer access in Texas and specialty service lines to address growing care needs. Specialty areas include rheumatology, dermatology, cardiology, endocrinology, and mental health.

“We are committed to a new advanced clinical model and payment structure that rewards providers to reduce population health risks and lower overall costs,” said Harbor Health Co-Founder Tony Miller, in a statement. “People want personalized care and clear guidance on how to make lifestyle changes and informed decisions about treatment and costs. Employers need better options to keep rising healthcare benefit costs under control. We know we can deliver the plans at a 10% to 20% savings while making the plans richer for the members.”

Existing investors General Catalyst, 8VC, and Alta Partners co-led the funding, while DFO Management (Dell Family Office) increased its support of Harbor Health. This funding round also includes returning investors Health 2047 Capital Partners, Lemhi Ventures, Martin Ventures, Breyer Capital and a series of individuals.

In his interview last year with Healthcare Innovation, Johnston said their ambitious plan was to create a whole operating system for healthcare. “Currently, everything works on fee for service, and there's the RVU system that kind of drives clinician behavior, and there are copays, coinsurance, deductibles. What we're trying to do is rebuild all of that stuff to change the underlying incentive structures and operating system so that it then can become more easily exportable,” he said. “So we wouldn't necessarily need to own the practices for them to practice in this different way. That's ultimately what we're thinking will allow more rapid scaling. Our ambitions do definitely go beyond Texas, but we're not going to do anything in that respect until we're quite confident that we have the model right, that it's highly successful here, and that it's ready to to scale.”